35 bps rate cut welcomed but more needs to be done Shishir Baijal, Knight Frank India - MYREALITY.In, Real Estate, Share Market, Mutual Fund, Insurance
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Wednesday, August 07, 2019

35 bps rate cut welcomed but more needs to be done Shishir Baijal, Knight Frank India

35 bps rate cut welcomed but more needs to be done
Shishir Baijal, Knight Frank India


35 bps rate cut welcomed but more needs to be done
Shishir Baijal, 
Chairman & Managing Director, 
Knight Frank India


While it is the fourth consecutive rate cut this year and is in line with RBI’s recent shift to an accommodative monetary policy stance, it may not be sufficient to give the required impetus to the stalling consumption numbers.

Of the 75 bps rate cuts thus far, only up to 35 bps have been seemingly transmitted to end users and with this backdrop, another similar rate revision is not expected to trickle down much.

Further, after RBI’s announcement of a shift in policy stance, markets were already expecting a 25 - bps cut from the August MPC, although the present announcement is only moderately higher than expected.
Shishir Baijal,
Knight Frank India

On this backdrop, RBI’s 35 bps rate cut is only marginal, more so for the real estate sector. The NBFC liquidity crisis has severely choked credit availability for the industry, especially developers, as they struggle to raise even construction finance.

While the limit for priority sector lending for housing has been enhanced from Rs. 10 Lakhs to Rs. 20 Lakhs, the scope of this move is limited to affordable housing segment. More needs to be done to provide a liquidity stimulus to the broader real estate spectrum.

As the threat of a slowdown looms large on the Indian economy, strong measures such as substantial rate cuts and meaningful sector specific policies need to be taken.”



35 bps rate cut welcomed but more needs to be done Shishir Baijal, Knight Frank India Reviewed by Investment Guru on August 07, 2019 Rating: 5 35 bps rate cut welcomed but more needs to be done Shishir Baijal, Knight Frank India 35 bps rate cut welcomed but more needs to ...

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